Munoz Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory: April $107,000 May $127,000 June Required purchases (on account) $139,000 Munoz Books's accountant prepared the following schedule of cash payments for inventory purchases. Munoz Books's suppliers require that 85 percent of purchases on account be paid in the month of purchase; the remaining 15 percent are paid in the month following the month of purchase. Required a. Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. b. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter.
Munoz Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory: April $107,000 May $127,000 June Required purchases (on account) $139,000 Munoz Books's accountant prepared the following schedule of cash payments for inventory purchases. Munoz Books's suppliers require that 85 percent of purchases on account be paid in the month of purchase; the remaining 15 percent are paid in the month following the month of purchase. Required a. Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. b. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Munoz Books buys books and magazines directly from publishers and distributes them to grocery stores.
The wholesaler expects to purchase the following inventory:
April
$107,000
May
$127,000
June
Required purchases (on account)
$139,000
Munoz Books's accountant prepared the following schedule of cash payments for inventory purchases.
Munoz Books's suppliers require that 85 percent of purchases on account be paid in the month of
purchase; the remaining 15 percent are paid in the month following the month of purchase.
Required
a. Complete the schedule of cash payments for inventory purchases by filling in the missing amounts.
b. Determine the amount of accounts payable the company will report on its pro forma balance sheet at
the end of the second quarter.
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